How to Repair My Own Credit Fast | Ultimate Guide to Start Credit Repair | The Credit Gold eBook Course
There's not anything that a credit repair service can legally do for you—even removing inaccurate information—that you can't do for yourself practically for free. And the cost of hiring such a company can easily cost you thousands of dollars.
It may seem like a smart decision to let a credit repair company fix your credit, but fixing it on your own is the smartest long term decision you can make for your financial well-being. Plus, these companies love to string you along for as many months as possible to squeeze every bit of money out of you instead of helping you expedite the process. So lets create our own financial independence with the right education. While you're working on your credit, you can become an affiliate and get paid from us! check out our affiliate partnership opportunities
What Is the Credit Repair Organizations Act?
Credit repair companies dispute/challenge negative information found on your credit report. But transparency with customers is something that credit repair companies are notorious for not achieving. Some will even lie to you about their services and expectations to get you as a customer for you to only find out 6 months to a year later more than likely.
The Credit Repair Organizations Act (CROA) is a federal law that became effective April 1, 1997, in response to credit repair scams entrapping consumers. Current law states that credit repair service companies:
- Are prohibited from taking any payment from a consumer until they fully complete the services they promise.
- Are required to provide consumers with a written contract stating all the services to be provided as well as the terms and conditions of payment. Under the law, consumers have three days to withdraw from the contract.
- Are forbidden to ask or suggest that you mislead credit reporting companies about your credit accounts or alter your identity to change your credit history.
- Cannot knowingly make deceptive or false claims concerning the services they are capable of offering.
- Cannot ask you to sign anything that states that you are forfeiting your rights under the CROA. Any waiver that you sign cannot be enforced.
The CROA adds clarity and better overall investigation to the credit repair process, making it less likely that consumers will at the disposition of credit repair companies. However, regulators still find them guilty of these same violations.
The CFPB (Consumer Financial Protection Bureau) may sue credit repair companies for such violations as charging up front fees, misleading consumers, and more.
Can You Pay A Company to Fix Your Credit?
Have you ever seen a sinking boat on TV? That's what fixing your credit is like with a credit repair company in general. You want to learn how to treat your credit properly to prevent yourself from ending back in the sinking ship of a bad credit score. If you believe something is wrong with your credit report, credit repair companies may offer to dispute those items for you. They usually charge a monthly fee or flat rate for their work based off deletion of your items. You can go this route, but you're shooting yourself in the foot in the long term.
Your credit got messed up because of the actions you took or someone took on your behalf (hopefully not as this is identity theft). If you had an 800 credit score tomorrow and did all the same things you did to get the score you have now, your score would instantly drop with the first mistake you make. That's why education is more important than just fixing your immediate credit circumstance.
The Credit Gold Ebook Course is one of the best ways we've seen people turn their credit scores around and learn the financial literacy of personal credit education. They include some techniques that helped some of our friends fix lots of items on their credit report in a few weeks and even days depending on what was happening. Even though this is true, credit repair takes time. You can't expect years of financial issues to get repaired in a day. You have to be patient, make your plan, and execute. It's not that hard once you have a plan and that's why we recommend that Ebook. You can even build your credit for the specifications of the type of funding you want after your credit is repaired! But if you still decided to pay a credit repair company, there's no guarantee your problem will be fixed within a time frame of your budget unless it's longer than a few months depending on your credit report.
How to "Fix" My Own Credit
There is no quick fix for your credit, but it can be simplified until you learn more about it. That's why we recommend using that Ebook because it has lifetime updates to it and continually finds new solutions to current problems with credit repair as they arise. Regulations, credit repair techniques, and laws about credit change more often than you'd think. Information that is negative but accurate (such as missed payments, charge-offs or collection accounts) will stay on your credit report for up to 10 years, but this may change as new laws evolve in the future.
After the negative items on your credit report are handled appropriately then you can look into adding authorized users to your credit report to dramatically improve your credit age and available credit limit for your vantage score. Basically, you can piggy back off someone else's credit card history, but it doesn't work well at all if you have any negative items on your credit report because lenders know people do this, but lots of them like to see these on your credit reports on top of a squeaky clean credit profile. Before adding authorized users, have your credit fixed and know what type of funding you're looking to build your history, utilization, and credit limit towards.
You can try to use free software like creditverso, but not understanding how to repair your own credit will not make the software work. The Credit Gold Ebook may be used with software like this for expedited result tracking.
The 3 main credit bureaus are Experian, Transunion, and Equifax. If you find information you don't recognize on your credit report as yours, this may be a sign of identity theft, or you may not recognize the name of the creditor/collection account. Anything that's inaccurate, erroneous, or unjust may be removed from your credit report legally and this is explained in detail within The Credit Gold Ebook and ways to dispute items in a time efficient way. Lenders check your credit report to see how creditworthy you are.
One major flaw that credit repair companies may push on consumer is to fall victim to building your credit profile for the incorrect goal and mislead you with various types of scoring models. One may wish to build their credit to get $50,000 in funding, but can only get approved for $3,000 across multiple cards/loans because their credit profile was built out incorrectly for that goal having the same score as someone with a thicker history of credit information.
If you want to know what scores you need for approval, we use creditboards.com or look inside The Credit Gold Ebook in the section that tells the scores needed for what types of funding. It's nice that they periodically update this too.
If you find anything wrong with your credit report, file a dispute with each of the credit bureaus.
If you find information that is incorrect, you can file a dispute with the credit reporting agency on whose report you found it. You should also contact the lender that is reporting the incorrect information directly and ask them to correct their records.
Improving Payment History
Payment history is seriously important with FICO® scoring models. Late and missed payments will reduce your credit scores, and bankruptcies and collections can cause heavy damage. This negative account information will remain on your credit report and impact your credit scores for about seven to ten years.
Don't miss payments! Make sure to not use your credit in a way that costs you money that you don't have a plan to pay back effectively within the allotted time. You need to mitigate your risk appropriately to your level of tolerance to risk.
Your scores often take into account the size of your debt and the timing of your missed payments. The bigger your debt is, and the more recent your missed payments are, the worse your score will be, typically. Bringing accounts current and continuing to pay on time will almost always have a positive impact on your credit scores.
Whats My Credit Utilization Ratio
A credit utilization ratio is the percentage of debt being used of the total amount available to you to use at once. For example, if I have a combined $5,000 credit access from two cards that have $2,500 limit each , I can spend $500 between both of them to average my credit card utilization to 10%.
Card 1: $2,500 using $300
Card 2: $2,500 using $200
Credit utilization: 10% because we're using $500 of $5000 available to us. This is considered our available revolving debt.
Revolving debt are things like credit cards and lines of credit. Installment debt are things like student loans, Bank loans, car loans, etc. Revolving debt means that you have access to a replenishing pool of money and installment means that it's a fixed agreement that does not allow you to re-borrow. Mortgages are installment debt, but one may borrow against the equity in their home. This is a Home Equity Loan or Home Equity Line of Credit.
High credit utilization can negatively impact your credit scores. Generally, it's a good idea to keep your credit utilization ratio below 30%, but better utilization increases your score, so keep it as low as possible below 10%.
There are a few different ways you can reduce your credit utilization rate:
- Start paying down your account balances.
- Increase your total available credit by opening a new credit card account or requesting a credit limit increase on an existing card (this may hurt your score in other ways depending on how your credit is laid out such as credit age)
- Consolidate your credit card debt with a personal loan, which isn't included in your credit utilization rate calculation. You can also do a balance transfer. Balance transfer cards are only smart to use if it financially benefits you to transfer the balance over. This is often the case because of the interest difference on balance transfer cards may be lower than your current credit card.
That said, while increasing your credit limit may seem like an appealing option, it can be a risky move.Each new card results in a hard inquiry. This will appear on your credit report and could temporarily reduce your credit score by a few points. If you have unauthorized inquiries on your credit report, there's a 24 hour inquiry deletion technique taught in The Credit Gold Ebook that's worked as of mid 2021. They even respond to people who tell them about their results too with information from the Ebook when you email them.
Also, while consolidating your debt with a personal loan can drop your utilization rate to zero immediately, it can be tough to get approved for a loan with a reasonable interest rate if your credit score is in poor shape.
As such, paying down your balances on credit cards and other revolving credit accounts may be the best option to improve your credit utilization rate and, subsequently, your credit scores.
Consider How Many Credit Accounts You Have
Scoring models consider how much you owe and across how many different accounts. If you have debt across a large number of accounts, it may be beneficial to pay off some of the accounts, if you can.
Paying down credit card debt is the goal of many who've accrued debt in the past, but even after you pay the balance down to zero, consider keeping that account open. Not only can closing it hurt scores by eliminating that available credit and increasing your credit utilization ratio, but keeping paid off accounts open can also be a plus because they're aged accounts in good (paid-off) standing. And again, you may also consider debt consolidation.
Think About Your Credit History
Would you jump out of an airplane if it was only tested for 3 months with no prior reason to trust it? This is how creditors see new credit profiles. Increasing your history with authorized users is one strategy to counter this problem, but must be done correctly so don't just go buy one without the proper education. Credit scoring models, like those created by FICO®, often factor in the age of your oldest account and the average age of all of your accounts, rewarding individuals with longer credit histories. Before you close a credit card account, think about your credit history. It can be beneficial to leave a credit card open even if you've paid it off and don't plan on using it anymore.
Of course, if keeping accounts open and having credit available could trigger additional spending and debt, you may choose to close the accounts after all. Like fingerprints, every person has a unique financial situation, and only you know all the ins and outs of yours. Make sure you carefully evaluate your situation to figure out the approach that works best for you.
Be Wary of Opening New Credit too Soon
Opening several credit accounts in a short period of time can cause you to appear risky to lenders and, in turn, negatively impact your credit scores. Before you take out a loan or open a new credit card account, consider the effects it could have on your credit. What is it you want to get with your credit? Are you selling yourself short by taking the low hanging fruit? Of course you won't do that! Also, do not close accounts unless you want to hinder your credit score by lowering the available amount of revolving debt on your credit report. Closing accounts will only hurt you as of now so don't do it unless there's a very specific reason and we can't think of any.
Note, however, that when you're buying a car or looking around for the best mortgage rates, your inquiries may be grouped together and counted as only one inquiry for the purpose of credit scoring. If you repair your credit and can get approved for one car, you could potentially apply for multiple in the same day with this tactic and get approved for both! Check out The Credit Gold Ebook for more education on personal credit. In many commonly used scoring models, recent inquiries have a greater effect than older inquiries, and they only appear on your credit report for 24 months. If you have unauthorized inquiries, this Ebook has a 2 day unauthorized inquiry deletion strategy that's been super useful to us and it's free as of 7/15/21 to give back to everyone in our wonderful Credit Gold family!
How Long Does It Take to Rebuild Credit?
Basically it varies off of what is on the credit report. If you're a victim of identity theft and someone ran up a $100,000 in your name illegally with tons of cards, then you may have a difficult time getting it all removed in a timely manner without extensive effort. If you're a victim of identity theft, contact the FTC. If you have a few inaccurate or unjust collections, it can take a month potentially or a few weeks or much longer depending on the response of the credit bureaus you dispute with. Normally, when people dispute things the right way in the first place, it gets removed easier without leaving a messy trail of disputes that make your efforts look less important with each letter to these credit bureaus. That's why using a resource like The Credit Gold Ebook is so useful to fix and build your credit intelligently with a game-plan.
Once the negatives are being addressed on your credit report and being disputed or handled, you can start building your credit towards whatever you want! If you want to know how to get a particular institutions funding, then do research on their pre-qualification and underwriting process. You can call that lender or financial institution and say "Hey. I want to build my credit to get approved for "x" (type of funding you desire). What do I have to do? I'm new to using credit". Sometimes, they'll try to get you to apply for that credit or loan you desire without helping you with you question so be smart. Don't let them have you apply for anything before you work on getting your credit in position to get lower interest rates. These lenders love to see desperation and feed off your desire to get money fast. Don't be in between building your credit to only lock yourself out of getting larger amounts of funding within a similar time frame just because you were too eager.
If you're making payments or reducing your credit card balances, don't worry if your credit report isn't updated right away. Creditors report credit reporting agencies on a periodic basis, usually monthly. It can take up to 30 days or more for your account statuses to be updated, depending on when in the month your creditor or lender reports their updates.
It's critical that you check your credit score regularly to keep track of your progress and make sure the right information is being reported over time. As you build a positive credit history, over time, your credit scores will likely improve, and you'll have a better chance of qualifying for favorable credit terms when you need to borrow again.
How to Get Extra Help With Your Credit and Debt
In some cases, debt consolidation loans can provide lower interest rates and reduced monthly payments, as long as you qualify and stick to the program terms. With a balance transfer card, you can typically get an introductory 0% APR promotion, during which you can pay down the balance interest-free. Just be mindful not to continue charging on the original card once the balance is transferred.
If your debt feels overwhelming and your credit isn't good enough to get a balance transfer card or a low-interest personal loan, it may be valuable to seek out the services of a reputable credit counseling agency. Many are nonprofit, and you can typically get a consultation with personalized advice for your situation at no cost.
You can review more information on selecting the right reputable credit counselor for you from the National Foundation for Credit Counseling.
Credit counselors can also help you develop a debt management plan (DMP) with unsecured debt like credit cards. With this arrangement, you'll make your monthly debt payments to the credit counseling agency, and it will disburse the funds to your creditors. The agency may also be able to negotiate lower monthly payments and interest rates.
If the credit counselor negotiates settled amounts that mean you pay less to your creditors than was originally owed, your credit score could take a hit. In addition, your credit report may denote that accounts are paid through a DMP and were not paid as originally agreed, which may be viewed negatively by lenders. However, using a DMP may not negatively impact your credit history when you continue to make payments on time as agreed under the new terms.
Keep Track of Your Credit After You've Reached Your Goal
Once you've done the work to rebuild your credit history, you may be tempted to move on and focus on something else. While you likely won't need to focus as much on your credit score as you used to, it's still a good idea to keep an eye on it.
Monitoring your credit will help you spot any potential issues that could cause your credit score to drop again. It'll also give you a heads up if someone commits identity theft, so you can address it before it gets out of hand.
With Experian's free credit monitoring tool, you'll get access to your FICO® Score☉ powered by Experian data and also an updated copy of your Experian credit report. You'll also get real-time alerts about new inquiries and accounts, suspicious activity and changes to your personal information.
Learn More About Repairing Your Credit
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How to Improve Your Credit Score
There are steps you can take to increase your credit score, and the sooner you address certain factors, the faster your credit score will go up.